Guam § 10210 - Covenants and Agreements That May Be Contained in

§ 10210. Covenants and Agreements That May Be Contained in

Indenture.

An indenture pursuant to which bonds are issued may include any

and all covenants and agreements on the part of the Authority as the

Board deems necessary or advisable, including without limiting the

generality of the foregoing, any one or more of the following:

(a) A provision that payments of principal and interest of

bonds shall be secured by all or by part of revenues and provisions

creating one or more funds or accounts to be held by the Authority

or bond trustee into which all or any part of revenues shall be

deposited:

(1) for payment of the principal of and interest on bonds

at or prior to maturity; or

(2) for reserve or sinking funds for the further security of

bonds.

All moneys in any such fund or account shall be paid out by

the Authority or its agent to pay the principal of and interest on

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the bonds when due or when redeemed or purchased prior to

maturity, as provided in any indenture.

(b) A provision requiring the Authority or its agent, as trustee

as hereinafter provided, to pay or cause to be paid punctually the

principal of all such bonds and the interest thereon on the date or

dates, or at the place or places and in the manner mentioned in such

bonds and/or in the coupons appertaining thereto in accordance with

such indenture.

(c) A provision requiring the Authority to operate the system

continuously, to the extent practicable under conditions as they may

from time to time exist, in any efficient and economical manner.

(d) A provision requiring the Authority to maintain the system

and to make all necessary repairs, renewals and replacements to the

system and to keep the system at all times in good working order

and condition.

(e) A provision requiring the Authority to preserve and protect

the security of the bonds and the rights of the holders thereof and to

warrant and defend such rights.

(f) A provision requiring the Authority to pay and discharge or

cause to be paid and discharged all lawful claims for labor, materials

and supplies or other charges which, if unpaid, might become a lien

or charge upon revenues or any part thereof, or which might impair

the security of the bonds.

(g) A provision which limits, restricts or prohibits any right,

power or privilege of the Authority to mortgage or otherwise

encumber, sell, lease or dispose of the system or any part thereof, or

to enter into any lease or agreement which impairs or impedes the

operation of the system or any part thereof necessary to secure

adequate revenues or which otherwise impairs or impedes the right

of the holders of bonds with respect to such revenues.

(h) A provision requiring the Authority to fix, prescribe and

collect annually rates or other charges in connection with the system

services furnished from the system which, together with other

available revenues, will be:

(1) sufficient to pay the principal of and interest on the

bonds as they become due and payable, together with such

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additional sums as may be required for any bond reserve fund

or account or other fund or account created by the indenture for

the security of such bonds;

(2) sufficient to pay the annual system operation and

maintenance costs; and

(3) in such additional amount as shall be provided in the

indenture for the further security or protection of such bonds.

(i) A provision that no service relating the system shall be

furnished free of charge to any person, except to the extent

permitted by the indenture.

(j) A provision requiring the Authority to hold or cause to be

held in trust the revenues or any part of revenues pledged to the

payment of such bonds and the interest thereon, or to any fund or

account created by any indenture relating to such bonds for the

further security or protection of such bonds and to apply such

revenues or any part of revenues or cause them to be applied only as

provided in the indenture and to invest all or any part of such

revenues pending such application in such securities and subject to

such limitations as are specified in the indenture.

(k) A provision defining the power of the Authority in applying

the proceeds of the sale of any issue of bonds for the acquiring,

constructing or completing of the system or any part thereof.

(l) A provision permitting the Authority to issue additional

bonds or one or more additional series of bonds, equally secured

with bonds theretofore issued under the indenture, for the purpose of

acquiring, constructing or completing, improving or extending the

system or any part thereof or for the purpose of refunding any prior

bonds or any other obligations of the Authority or for any purpose

authorized by law; and a provision limiting the power of the

Authority to issue any additional bonds so secured or any other

additional bonds for such purpose.

(m) A provision requiring, specifying or limiting the kind,

amount and character of insurance (or any reserve fund or funds in

lieu of insurance) to be maintained by the Authority on the system

or any part thereof and the use and disposition of the proceeds of

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any such insurance thereafter collected or of the moneys in any such

reserve fund.

(n) A provision specifying the events of default and the terms

and conditions upon which any or all of the bonds of the Authority

then or thereafter issued may become or be declared due and

payable prior to maturity, and the terms and conditions upon which

such declaration and its consequences may be waived.

(o) A provision designating the rights, limitations, powers and

duties arising upon breach by the Authority of any of the covenants,

conditions or obligations contained in the indenture.

(p) A provision prescribing a procedure by which the terms

and conditions of the indenture may be subsequently amended or

modified with the consent of the Authority and the vote or written

consent of the holders of a specified principal amount or specified

proportion of the bonds issued and outstanding, including provisions

for meetings of bondholders and for the manner in which the

consent of the bondholders may be given and specifically stating the

effect of such amendment or modification upon the rights of the

holders of all of the bonds and interest coupons appertaining thereto,

whether attached thereto or detached therefrom. With respect to any

provision relating to the modification or amendment of an

indenture, the Authority may agree that bonds held by the Authority,

Guam, the United States or any instrumentality of either thereof

(including every public corporation, political subdivision, city,

county, district, board, agency or instrumentality of any kind of

class) shall not be counted as outstanding bonds, or be entitled to

vote or assent, but shall, nevertheless, be subject to any such

modification or amendment.

(q) A provision limiting the right of action by individual

bondholders in the event of a default by the Authority or proscribing

the procedure for the conduct of any such action by an individual

bondholder.

(r) A provision permitting the Authority to purchase

outstanding bonds of the Authority from any moneys or funds or

accounts referred to in the indenture or otherwise legally available

for such purpose.

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(s) A provision for any working capital fund or account or

contingency fund or operating reserve account relating to the

system.

(t) A provision for the replacement of lost, destroyed or

mutilated bonds or coupons.

(u) A provision or provisions relating to such other acts and

matters as may be necessary or convenient or desirable in order

better to secure the bonds or to make the bonds more marketable.